Explains the option you calculated

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Reference no: EM131504090

Assignment: Currency Options

Recently currency options are the new popular form of hedging. Use the Internet to locate a currency options calculator. Use the information in the chart below and calculate a currency option.

Detail

Amount

Domestic Currency

USD

Foreign Currency

EUR

Option Type

Call

Interest Rate

5%

Spot price

$1.57 cents

Spot Date

6/12/2012

Principle

200,000

Strike Price

Create this price

Expiration Date

7/12/2012

Volatility

2%

Research on the Internet and the Rasmussen research databases and write a 1 to 2 page paper that:

• Explains the option you calculated.

• Describes how hedging can be of advantage or disadvantage to the option.

• Use APA formatting for any citations and reference page.

Reference no: EM131504090

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